Opinion
Rehearing Denied May 15, 1985.
Review Granted July 11, 1985.
Opinion on pages 28-180 omitted.
[213 Cal.Rptr. 328]Ronald A. Zumbrun, John H. Findley, Anthony T. Caso, Pacific Legal Foundation, Sacramento, William J. Cumero, Greenfield, for petitioner.
Michael J. Tonsing, PERB, San Francisco Regional Office, San Francisco, Dennis M. Sullivan, Gen. Counsel, Jeffrey Sloan, Asst. Gen. Counsel, Peter Haberfeld, Regional Atty., Elaine B. Feingold, Legal Counsel, PERB, Sacramento, for respondent.
Kirsten L. Zerger, Raymond L. Hansen, Diane Ross, Ramon E. Romero, Burlingame, Joseph G. Schumb, Jr., LaCroix & Schumb, San Jose, David Berteaux, Superintendent, King City Joint Union High School District, Gorden Mittelsteadt, Pres., King City High School CTA/NEA, King City, Jan Alton Walker, Salinas, Robert Chanin, Gen. Counsel, James Altman, National Education Assoc., Washington, D.C., for real parties in interest.
A. Roger Jeanson, Haas & Najarian, San Francisco, Rex H. Reed, Robert F. Gore, Jeffrey D. Wedeking, National Right to Work Legal Defense Foundation, Inc., Springfield, for amicus curiae National Right to Work Legal Defense Foundation.
J. Albert Woll, Laurence Gold, Washington, D.C., Marsha S. Berzon, Michael Rubin, Altshuler & Berzon, Charles P. Scully, Donald C. Carroll, Charles P. Scully, II, Law Offices of Charles P. Scully, Inc., San Francisco, for amicus curiae California Labor Federation AFL-CIO.
WHITE, Presiding Justice.
Petitioner, a high school teacher employed by the King City Joint High School District (District) but not a member of the King City High School District Association, CTA/NEA (Union), challenges the withholding of a portion of his paycheck as a "service fee" and the use of that service fee by the Union for purposes not directly related to negotiation, contract administration [213 Cal.Rptr. 329] and grievance handling. In a lengthy and detailed opinion, the Public Employment Relations Board (PERB or Board) rejected most of petitioner's objections, applying general guidelines from Abood v. Detroit Board of Education (1977) 431 U.S. 209, 97 S.Ct. 1782, 52 L.Ed.2d 261. In April of 1984, while this petition was pending in this court, the United States Supreme Court decided Ellis v. Broth. of Ry., Airline and S.S. Clerks (1984) 466 U.S. 435, 104 S.Ct. 1883, 80 L.Ed.2d 428. We ordered the matter on calendar to consider the effect of Ellis upon the Board's decision in this case.
This proceeding arises under the Educational Employment Relations Act (Stats.1975, ch. 961, § 2, p. 2247, operative July 1, 1976; codified as Gov.Code, §§ 3540-3549--hereinafter the Act or the EERA). The EERA established a system of collective bargaining for employees of public school districts educating students in grades kindergarten through 14. It required the school district employer to meet and negotiate in good faith with the duly selected exclusive representatives of its employees as to statutorily defined subjects. It provided that the parties may enter a binding agreement and may reach an agreement for resolving disputes. The Act created PERB as an independent board with broad powers to administer the Act. (San Mateo City School Dist. v. Public Employment Relations Bd. (1983) 33 Cal.3d 850, 855-857, 191 Cal.Rptr. 800, 663 P.2d 523.)
In 1976, the King City High School District Association, CTA/NEA, became the exclusive representative for all nonmanagement certified employees of the King City Joint Union High School District, including petitioner, pursuant to the Act. On September 14, 1976, District and Union entered into a collective bargaining agreement which required all employees in the bargaining unit either to join Union or to pay Union a fee in an amount equal to the combined dues of Union, California Teachers Association (CTA) and National Education Association (NEA). The collective bargaining agreement also provided for the fee to be deducted from the nonmember's paycheck with or without the nonmember's authorization. Petitioner wished neither to join Union nor to pay a fee which would be used to finance political and ideological activities which he opposed. District nevertheless withheld a $150 fee from his paycheck in 10 monthly installments without his authorization.
On October 12, 1976, petitioner filed an unfair practice charge with the Board, alleging that Union had violated sections 3543.5, 3543.6, 3545, and 3546 of the Government Code and "Federal and State Due Process Laws." An amended charge was filed on March 23, 1977. District, CTA and NEA were subsequently joined as co-respondents with Union.
After prolonged prehearing procedures, the matter came on for hearing before a hearing officer who found (1) that District and respondent organizations had violated the Act by collecting an agency fee without petitioner's written consent; (2) that District and respondent organizations had violated the Act by using the agency fee for impermissible expenditures, such as (a) charitable contributions to the Martin Luther King Scholarship Fund, (b) expenses of recruiting and organizing, and (c) paying for personal liability insurance available only to members; (3) that the exclusive representative had separately and independently violated its duty of fair representation under the Act by assessing petitioner for services for which he was ineligible; (4) further, that the service fee refund procedure established by the statewide CTA violated the Act. The hearing officer proposed the remedy of the restoration of the status quo for the wrongful acts, reasoning that the status quo could only be restored if the service fee was refunded in its entirety with interest. The hearing officer also proposed that the offending portions of the collective bargaining agreement allowing the deduction of the service fee without prior authorization be rescinded. The proposed order contained cease and desist language [213 Cal.Rptr. 330] and proposed affirmative actions to effectuate the purposes of the Act.
Petitioner excepted to the proposed decision. District, Union and CTA excepted to the proposed decision. On March 3, 1982, the Board issued its decision vacating the proposed order of the hearing officer. The Board found that payroll deduction of the service fee did not require petitioner's consent, found expenses for recruiting and organizing to be a proper use of the service fee, found the use of service fees to support candidates for local office or otherwise to assist in such campaigns to be an improper use of service fees, and agreed with the hearing officer with respect to improper use of the service fee for personal liability insurance available only to members. The Board set forth a list of permissible uses of the service fee, but did not reach a decision on the rebate procedure, concluding that the rebate procedure was a matter for arbitration.
The Board concluded by dismissing the complaint except as to the charge that the use of service fees to provide classroom liability insurance was a violation of section 3544.9 and except as to the charge that Union had improperly utilized petitioner's service fees in support of candidates' campaigns for public office. The Board remanded to the Chief Administrative Law Judge the question of whether service fees were used to support candidates' campaigns for public office or to administer the Martin Luther King Scholarship Fund (on which the Board was unable to reach majority position). The Board ordered Union to refund to petitioner the pro rata share of service fees collected which had been used to provide classroom liability insurance, and, if found, the pro rata share of service fees used in support of candidates' campaigns for public office, and to reduce Cumero's future fee obligation accordingly.
Petitioner then filed his petition for writ of review in this court. Briefs amicus curiae supporting and opposing the petition have been filed by National Right to Work Legal Defense Foundation, Inc., and the American Federation of Labor--Congress of Industrial Organizations (AFL-CIO), respectively.
Among the provisions of the Act is an authorization for the parties to agree to an "organizational security arrangement" such as an "agency shop." (See San Lorenzo Education Assn. v. Wilson (1982) 32 Cal.3d 841, 843, fn. 1, 187 Cal.Rptr. 432, 654 P.2d 202.) Government Code section 3546 provides, in pertinent part: "[p] Subject to the limitations set forth in this section, organizational security, as defined, shall be within the scope of representation. [p] (a) An organizational security arrangement, in order to be effective, must be agreed upon by both parties to the agreement...." "Organizational security" is defined in Government Code section 3540.1, subdivision (i), to mean either: "(1) An arrangement pursuant to which a public school employee may decide whether or not to join an employee organization, but which requires him, as a condition of continued employment, if he does join, to maintain his membership in good standing for the duration of the written agreement ...; or (2) An arrangement that requires an employee, as a condition of continued employment, either to join the recognized or certified employee organization, or to pay the organization a service fee in an amount not to exceed the standard initiation fee, periodic dues, and general assessments of such organization for the duration of the agreement, or a period of three years from the effective date of such agreement, whichever comes first."
Shortly after the Act went into effect, the United States Supreme Court, in Abood v. Detroit Board of Education, supra, 431 U.S. 209, 97 S.Ct. 1782, 52 L.Ed.2d 261, upheld an "agency shop" provision in an agreement between a teacher's union and the Detroit (Michigan) Board of Education. The court addressed objections that agency shop arrangements violated "the constitutional rights of government employees who object to public-sector unions as such or to various union activities financed by the compulsory service fees." (Id., at p. 211, 97 S.Ct. at p. 1787.)
[213 Cal.Rptr. 331]The Abood court first noted the public interest in exclusive union representation and listed some of the expenditures required for a union to "fairly and equitably" represent all employees, union and nonunion. It observed that a union shop arrangement "has been thought to distribute fairly the cost of these activities among those who benefit, and it counteracts the incentive that employees might otherwise have to become 'free riders'--to refuse to contribute to the union while obtaining benefits of union representation that necessarily accrue to all employees. [Citations.]" (Id., at pp. 221-222, 97 S.Ct. at pp. 1792-1793.)
Under a union shop agreement, an employee must become a member of the union within a specified period of time after hire, and must pay whatever union dues and fees are uniformly required. Under an agency shop agreement, the employee is required to pay a service fee, but not to join the union. The Abood court considered a union shop to be the "practical equivalent" of an agency shop under federal law. (Abood, supra, 431 U.S. 209, 211, 217, fn. 10, 97 S.Ct. 1782, 1787, 1790, fn. 10, 52 L.Ed.2d 261.)
The court acknowledged that compelled financial support had an impact upon nonmember employees' First Amendment interests, but it concluded that the interference with such interests was justified by the important contribution of the union shop to the system of labor relations. The Abood court concluded, however, that nonmembers could not be assessed to compensate the union for spending money "for the expression of political views, on behalf of political candidates, or toward the advancement of other ideological causes not germane to its duties as collective-bargaining representative." (Id., at p. 235, 97 S.Ct. at p. 1799.)
The Abood court did not examine on an expenditure-by-expenditure basis the challenged expenses by the teachers' union because the case came to it on the pleadings without an evidentiary record. It noted, however, that "[t]here will, of course, be difficult problems in drawing lines between collective-bargaining activities, for which contributions may be compelled, and ideological activities unrelated to collective bargaining, for which such compulsion is prohibited." (Id., at p. 236, 97 S.Ct. at p. 1800.)
In the case at bench, PERB attempted to apply the general guidelines from Abood to specific objections made by petitioner, noting that "[l]ike the Michigan statute considered in Abood, EERA is modeled after federal law." In their initial briefs to this court, the parties relied extensively upon Abood. However, while the matter was pending before this court, the United States Supreme Court rendered its decision in Ellis v. Broth. of Ry., Airline and S.S. Clerks, supra, 466 U.S. 435, 104 S.Ct. 1883, 80 L.Ed.2d 428 attempting to draw some of the lines left undrawn by Abood. We solicited further briefing on the effect of Ellis and issued the writ of review with an eye toward determining how Ellis applies to the EERA and to the contentions raised by petitioner.
The issues framed now are: (1) Is Ellis, a decision under the Railway Labor Act, applicable to interpretation of the EERA? (2) Are there differences between public sector and private sector collective bargaining that justify different rules about use of nonmembers' contributions? (3) In an issue-by-issue analysis, should the decision of PERB be sustained?
(1) IS ELLIS APPLICABLE TO INTERPRETATION OF THE EERA?
The parties agree that insofar as Ellis stated First Amendment law it must be followed by PERB. They disagree over how much of Ellis involved interpretation of the Railway Labor Act and how much of the decision stated constitutional law. Analysis of Ellis is required.
To explain Ellis (and Abood ) we turn back briefly to Railway Employees' Dept. v. Hanson (1956) 351 U.S. 225, 76 S.Ct. 714, 100 L.Ed. 1112 and International Ass'n of Machinists v. Street (1961) 367 U.S. 740, 81 S.Ct. 1784, 6 L.Ed.2d 1141. Hanson was a suit brought in the Nebraska courts by railroad employees required by a union [213 Cal.Rptr. 332] shop agreement to become members of a union (or lose employment and pension). The union shop agreement was authorized by the Railway Labor Act which expressly preempted state law to the contrary. The Hanson court upheld the concept of a union shop, finding that the record did not bear out the employees' First Amendment concerns: "On the present record, there is no more an infringement or impairment of First Amendment rights than there would be in the case of a lawyer who by state law is required to be a member of an integrated bar. It is argued that compulsory membership will be used to impair freedom of expression. But that problem is not presented by this record. Congress endeavored to safeguard against that possibility by making explicit that no conditions to membership may be imposed except as respects 'periodic dues, initiation fees, and assessments.' If other conditions are in fact imposed, or if the exaction of dues, initiation fees, or assessments is used as a cover for forcing ideological conformity or other action in contravention of the First Amendment, this judgment will not prejudice the decision in that case." (Railway Employees' Dept. v. Hanson, supra, 351 U.S. at p. 238, 76 S.Ct. at p. 721.)
In Street the court made good on its implied promise to prevent abuse of union security agreements. The record in Street would have permitted a ruling on the constitutional claim. However, the Street court instead construed the Railway Labor Act narrowly to avoid possible unconstitutionality. After examining the history of union security in the railway labor setting, the court concluded that in acting to discourage "free riders" Congress had no intention "to provide the unions with a means for forcing employees, over their objection, to support political causes which they oppose." (International Ass'n of Machinists v. Street, supra, 367 U.S. at p. 764, 81 S.Ct. at p. 1798.) The court explained: "We respect this congressional purpose when we construe § 2, Eleventh as not vesting the unions with unlimited power to spend exacted money. We are not called upon to delineate the precise limits of that power in this case. We have before us only the question whether the power is restricted to the extent of denying the unions the right, over the employee's objection, to use his money to support political causes which he opposes. Its use to support candidates for public office, and advance political programs, is not a use which helps defray the expenses of the negotiation or administration of collective agreements, or the expenses entailed in the adjustment of grievances and disputes. In other words, it is a use which falls clearly outside the reasons advanced by the unions and accepted by Congress why authority to make union-shop agreements was justified." (Id., at p. 768, 81 S.Ct. at p. 1800.)
Hanson and Street identified the two extremes, but left open the validity of expenditures in the area between costs of negotiating and administering agreements and expenditures to support union political activities. Abood also left open that issue. Abood's contributions were in considering remedies and in translating the statutory principles of Street into constitutional law. The constitutional question was squarely presented in Abood because the action arose from a Michigan agency shop law which permitted union expenditures for legislative lobbying and in support of political candidates. The Abood court ruled that First Amendment principles "prohibit appellees from requiring any of the appellants to contribute to the support of an ideological cause he may oppose as a condition of holding a job as a public school teacher." (Abood v. Detroit Board of Education, supra, 431 U.S. at p. 210, 97 S.Ct. at p. 1787.)
Ellis v. Broth. of Ry., Airline and S.S. Clerks, supra, 466 U.S. 435, 104 S.Ct. 1883, 80 L.Ed.2d 428 examined the area between Hanson and Street, first interpreting the Railway Labor Act and then upholding its constitutionality as interpreted. Respondents in this case discount the Ellis decision because of its concentration on statutory interpretation. Petitioner contends that it is controlling constitutional law. We must resolve this disagreement.
[213 Cal.Rptr. 333]In Ellis the objecting employees challenged union expenses for (1) a national convention, (2) litigation not involving negotiation of the agreements or settlement of grievances, (3) union publications, (4) social activities, (5) death benefits for employees, and (6) general organizing efforts. The United States Court of Appeals for the Ninth Circuit ruled that all these expenditures were permissible because they ultimately benefited the union's collective bargaining efforts. Ellis disagreed, interpreting the Railway Labor Act to preclude expenditures for (a) organizing, (b) litigation not incident to negotiating and administering the contract or to settling grievances, and (c) publication of information about activities for which the union could not spend dissenters' funds. It ruled that First Amendment considerations did not prevent the union from spending dissenters' funds on the remaining statutorily permitted activities (but the court declined to rule on the death benefits issue, the matter having become moot).
Ellis relied primarily upon statutory interpretation. Only after finding that the statute permitted expenditures for the national convention, social activities, and part of the publication expenses, did the court consider whether the First Amendment would permit such use of funds obtained from dissenting employees. But the constitutional significance of Ellis is not confined to this relatively brief discussion of the First Amendment.
Earlier in the opinion, the Ellis court affirmed its intention to follow the statutory analysis of Street: "We remain convinced that Congress' essential justification for authorizing the union shop was the desire to eliminate free riders--employees in the bargaining unit on whose behalf the union was obliged to perform its statutory functions, but who refused to contribute to the cost thereof." (Ellis v. Broth. of Ry., Airline and S.S. Clerks, supra, 466 U.S. 435, 104 S.Ct. 1883, 1892, 80 L.Ed.2d 428.) Significantly, though, at the same time it affirmed this statutory analysis, it gratuitously questioned its own conclusion.
In Abood, the court had acknowledged that "Street embraced an interpretation of the Railway Labor Act not without its difficulties, see 367 U.S., at 784-786 [81 S.Ct., at 1807-1808] (Black, J., dissenting); id., at 799-803 [81 S.Ct., at 1814-1817] (Frankfurter, J., dissenting), precisely to avoid facing the constitutional issues presented by the use of union-shop dues for political and ideological purposes unrelated to collective bargaining, id., at 749-750 [81 S.Ct., at 1789-1790]." (Abood, supra, 431 U.S. 209, 232, 97 S.Ct. 1782, 1798, 52 L.Ed.2d 261.) In Ellis, the court explained that Congress was well aware of the broad scope of traditional union activities, that witnesses had objected to the absence of any explicit limitation on the scope or amount of fees and dues that could be compelled, and that Congress had still failed to limit the scope of the union shop agreement. The Ellis court acknowledged that it "could be plausibly argued that Congress purported to authorize the collection from involuntary members of the same dues paid by regular members." (Ellis, supra, 104 S.Ct. at p. 1891.) But, without explanation, Ellis followed Street in its rejection of this view.
It is apparent that Ellis strained to read the Railway Labor Act as designed essentially to avoid the "free rider" problems because a broader reading would have conflicted with First Amendment rights of employees. Thus, we read Ellis to state a threshold standard for judging PERB's interpretation and application of the EERA. Unless differences between public-sector and private-sector collective bargaining dictate otherwise, only expenses not barred by the free rider test of Ellis should be allowed under the EERA.
(2) ARE THERE DIFFERENCES BETWEEN PUBLIC SECTOR AND PRIVATE SECTOR COLLECTIVE BARGAINING THAT JUSTIFY DIFFERENT RULES ABOUT USE OF NONMEMBERS' CONTRIBUTIONS?
The free rider test stated by Ellis, supra, 466 U.S. at p. ----, 104 S.Ct. at p. 1892 [213 Cal.Rptr. 334] is "whether the challenged expenditures are necessarily or reasonably incurred for the purpose of performing the duties of an exclusive representative of the employees in dealing with the employer on labor-management issues." Ellis was a private-sector case and did not explain how that test would apply to public-sector labor relations. Abood, however, provided some guidance.
In Abood, the employees argued that Hanson and Street did not control because public employees had different rights from private-sector employees and because public-sector bargaining was inherently political. Abood acknowledged significant differences, but concluded that the uniqueness of public employment was not in the employees or the work performed, but in the "special character of the employer." It concluded that Hanson and Street controlled because the differences between public- and private-sector collective bargaining did not translate into difference in First Amendment rights.
In spite of its holding, Abood did acknowledge that there might be differences between public- and private-sector rulings in drawing the lines between activities for which contributions may be compelled and those for which compulsion is prohibited: "The Court held in Street, as a matter of statutory construction, that a similar line must be drawn under the Railway Labor Act, but in the public sector the line may be somewhat hazier. The process of establishing a written collective-bargaining agreement prescribing the terms and conditions of public employment may require not merely concord at the bargaining table, but subsequent approval by other public authorities; related budgetary and appropriations decisions might be seen as an integral part of the bargaining process." (Abood v. Detroit Board of Education, supra, 431 U.S. at p. 236, 97 S.Ct. at p. 1800.)
We conclude that, though the test is the same for both public- and private-sector expenditures, the results of the test will depend upon the peculiarities of the duties of exclusive representatives in the two sectors.
(3) IN AN ISSUE-BY-ISSUE ANALYSIS, SHOULD THE DECISION OF PERB BE SUSTAINED?
Before we review PERB's various legal conclusions to determine whether each is consistent with Ellis, as it applies in the public sector, we must consider an issue of overriding importance: the Board's allocation of the burden of proof. If the Board erred in allocating the burden, such error permeated nearly all other portions of the decision.
(a) Burden of Proof
The Board, relying upon an Administrative Code section which places the burden of proof on the charging party (Cal.Admin.Code, tit. 8, § 32178), ruled against petitioner on several issues for failure to carry his burden of proof. Petitioner, citing Railway Clerks v. Allen (1963) 373 U.S. 113, 83 S.Ct. 1158, 10 L.Ed.2d 235, and Ellis v. Broth. of Ry., Airline and S.S. Clerks, supra, 466 U.S. 435, 104 S.Ct. 1883, 80 L.Ed.2d 428 contends that the burden was on the union because it possessed the information concerning expenditures.
Initially, petitioner also argued that the union was required to prove by clear and convincing evidence. Petitioner now concedes that Ellis rejected that heightened standard. (Ellis, supra, 466 U.S. 435, 104 S.Ct. 1883, 1897, fn. 15, 80 L.Ed.2d 428.) The Board applied the correct "preponderance of the evidence" standard.
In Allen dissenting employees refused to pay any service fees and brought an action to restrain enforcement of a union shop agreement. An injunction was issued, with a proviso that the union could have it modified by showing what proportion of expenditures was reasonably necessary and related to collective bargaining. The Allen court found the injunction procedurally improper, but made two determinations relevant here: (1) that the employees had sufficiently stated a cause of action by alleging that sums exacted under the agreement [213 Cal.Rptr. 335] had "been and are and will be regularly and continually used by the defendant Unions to carry on, finance and pay for political activities directly at cross-purposes with the free will and choice of the plaintiffs." (Railway Clerks v. Allen, supra, 373 U.S. at p. 118, 83 S.Ct. at p. 1162), and (2) that "[s]ince the unions possess the facts and records from which the proportion of political to total union expenditures can reasonably be calculated, basic considerations of fairness compel that they, not the individual employees, bear the burden of proving such proportion." (Id., at p. 122, 83 S.Ct. at p. 1163.)
The Allen court explained: "It would be impracticable to require a dissenting employee to allege and prove each distinct union political expenditure to which he objects; it is enough that he manifests his opposition to any political expenditures by the union. But we made clear in Street that 'dissent is not to be presumed--it must affirmatively be made known to the union by the dissenting employee.' 367 U.S., at 774 [81 S.Ct., at 1803].... No respondent who does not in the course of the further proceedings in this case prove that he objects to such use will be entitled to relief." (Railway Clerks v. Allen, supra, 373 U.S. at pp. 118-119, 83 S.Ct. at pp. 1161-1162, emphasis in original.)
Ellis considered the burden of proof question in a footnote, stating: "On remand, damages will have to [be] recalculated. Petitioners argue that a new trial is required because the District Court applied a preponderance of the evidence, rather than a clear and convincing, standard of proof. It is plain from the discussion of this issue in Allen, in which we held that the union bears the burden of proving what proportion of expenditures went to activities that could be charged to dissenters, that no heightened standard is appropriate in this situation...." (Ellis v. Broth. of Ry., Airline and S.S. Clerks, supra, 466 U.S. 435, 104 S.Ct. 1883, 1897, fn. 15, 80 L.Ed.2d 428.)
The Board concedes that Ellis and Allen may have stated a requirement that the union bear the burden of producing evidence reflecting the proportion of expenditures, but argues that petitioner was not prejudiced here by technical defects in the order of proof. The Board argues that those decisions have not shifted the burden of persuasion.
The Board's reading of Ellis and Allen is not justified. Clearly, both referred to the burden of persuasion, not the burden of production. Ellis, in particular, stated that "the union bears the burden of proving what proportion of expenditures went to activities that could be charged to dissenters" and stated that there was no heightened standard of proof. Standard of proof refers to the burden of persuasion, not the burden of producing evidence.
We read the Ellis/Allen burden of proof requirement as an inseparable part of the Ellis free-rider test which we consider to have constitutional stature. Where the union exacts payments from a dissenting employee, its interference with the employee's freedom not to associate may be justified only by the union's proof that the exacted funds were used for a purpose sanctioned by the free-rider rationale. The free-rider test would lose its effectiveness if the employee, without detailed information about the union's expenditures, were required to prove that the expenditures were improper.
We see no inconsistency in requiring the charging party to prove an unfair labor practice but requiring the union to prove how the employee's fees have been spent. The employee bears the burden of proof on all other issues, including that he or she made a proper objection to the use of the fees, and has the ultimate burden of proving an unfair labor practice. The employee must also state a prima facie case in the charging document. The union must prove only that which it knows intimately--how it spent the dissenter's funds.
A glimpse at the effect of this burden of proof ruling can be obtained by considering how the Board's erroneous ruling affected its rulings on expenses for social activities and charitable and philanthropic activities. As to expenditures for social activities, the Board noted that petitioner [213 Cal.Rptr. 336] had not provided any evidence as to the nature of the social activities and suggested that these social activities might have been properly funded by nonmember fees. Thus, the Board did not require refund of these fees. Under a proper allocation of the burden of proof, the union would have been required to prove what kind of social events the funds were used for and how much money was used for the social events.
PERB remanded to the administrative law judge the question of whether service fees were used to administer the CTA's Martin Luther King Scholarship Fund and whether such fees were refundable pursuant to PERB's decision. Petitioner maintains that PERB erred in failing to note also that the local association had its own scholarship program which was financed, in part, with petitioner's compelled agency fee. The Board argues that petitioner waived this objection by failing to raise it in the proceedings before the board.
But petitioner objected to improper use of his fees, including for scholarships. Under Allen, he was not required to do more. Because of misallocation of the burden of proof, the union failed to prove how the funds were used. On remand, the issue of funding for the local association's scholarship program may be considered.
The Board's other rulings were based upon interpretation of law, not sufficiency of proof or adequacy of objections. Thus, the burden of proof error does not directly affect these other rulings. However, because some of the Board's conclusions of law were erroneous, the matter must be remanded for rehearing. At a new hearing, the union will be required to prove what proportion of the total union expenditures went to activities for which dissenters could properly be charged. We now turn to the validity of the Board's other rulings.
(b) Lobbying and Other Political Activity
PERB ruled that dissenting employees could not be forced to support or oppose individual candidates and political parties, but concluded that service fees could be used to finance "(a) Lobbying in favor of or in opposition to legislation or policy affecting school employees' interest with respect to matter of employer-employee relations; (b) contributing to campaigns for or against ballot propositions related to employees' interests with respect to matters of employer-employee relations and school financing."
Ellis did not address the issue of lobbying or electioneering. Petitioner argues, however, that under the Ellis test such expenditures are not proper because they have nothing to do with the exclusive representative's dealings with the employer, the local school district. Petitioner contends that forced payment for these purposes impinges on his First Amendment rights and is not justified by the "free rider" rationale.
It is true that the "free rider" test stated in Ellis focused upon the "duties of an exclusive representative of the employees in dealing with the employer " (emphasis added) and that neither the state electorate nor the Legislature is petitioner's employer. But the Ellis test need not be applied so literally. The Ellis court itself explained that "[u]nder this standard, objecting employees may be compelled to pay their fair share of not only the direct costs of negotiating and administering a collective-bargaining contract and of settling grievances and disputes, but also the expenses of activities or undertakings normally or reasonably employed to implement or effectuate the duties of the union as exclusive representative of the employees in the bargaining unit." (Ellis v. Broth. of Ry., Airline and S.S. Clerks, supra, 466 U.S. at p. ----, 104 S.Ct. at p. 1892.)
In determining whether lobbying and electioneering fall within the scope of the "activities or undertakings normally or reasonably employed to implement or effectuate the duties of the union," the distinction between public- and private-sector labor relations becomes significant. In private-sector labor relations, political activity usually [213 Cal.Rptr. 337] has only an indirect effect upon employment conditions, which are established primarily by contract. In the public sector, legislation frequently has a more direct effect.
The purposes of the EERA, stated in Government Code section 3540, include affording "certificated employees a voice in the formulation of educational policy." Such policy is not made exclusively by negotiation with the particular employer. The same section provides that "[n]othing contained herein shall be deemed to supersede other provisions of the Education Code." Thus, education policy may be made through legislative action. Examples mentioned by PERB and not refuted by petitioner include "holidays, layoff and dismissal, tenure, professional certification and retirement."
Furthermore, as acknowledged by the Abood court, budgetary and appropriations decisions may be seen as an integral part of the bargaining process (Abood v. Detroit Board of Education, supra, 431 U.S. at p. 236, 97 S.Ct. at p. 1800.) Although these decisions are usually made at the local level, educational funding by other levels of government may also have a significant impact on employment conditions in the bargaining unit. Lobbying and campaigning at all levels may be warranted.
We conclude that PERB's ruling regarding lobbying and other political activity complies with the "free rider" test stated by Ellis. Lobbying and electioneering on matters of employer-employee relations and school financing are "activities or undertakings normally or reasonably employed to implement or effectuate the duties" of a public school employee union.
(c) Organizing and Recruiting
PERB held that expenses for organizing and recruiting could be assessed against dissenters on the theory that overall union effectiveness is a function of membership size and that the nonmember derives a benefit from that effectiveness. Petitioner contends that Ellis bars such an assessment against him.
Ellis addressed the issue of organizing expenses directly and concluded that they could not be justified by the rationale that a stronger union would be more successful at the bargaining table. As to organizing within the bargaining unit, the Ellis court considered it "perverse" to permit the union "to charge to objecting nonmembers part of the costs of attempting to convince them to become members." (Ellis v. Broth. of Ry., Airline and S.S. Clerks, supra, 466 U.S. at pp. ----, ----, fn. 13, 104 S.Ct. at pp. 1883, 1894, fn. 13.) Looking outside the bargaining unit, it concluded that only the most attenuated benefits to collective bargaining could be provided by recruiting members among workers outside the bargaining unit. (Ibid.) It explained why the "free-rider" rationale did not extend that far: "The image of the smug, self-satisfied nonmember, stirring up resentment by enjoying benefits earned through other employees' time and money, is completely out of place when it comes to the union's overall organizing efforts. If one accepts that what is good for the union is good for the employees, a proposition petitioners would strenously deny, then it may be that employees will ultimately ride for free on the union's organizing efforts outside the bargaining unit. But the free rider Congress had in mind was the employee the union was required to represent and from whom it could not withhold benefits obtained for its members. Non-bargaining unit organizing is not directed at that employee. Organizing money is spent on people who are not union members, and only in the most distant way works to the benefit of those already paying dues. Any free-rider problem here is roughly comparable to that resulting from union contributions to pro-labor political candidates." (Id., 104 S.Ct. at pp. 1883, 1894-1895.)
The Board seeks to distinguish the EERA from the Ellis situation on the grounds that educational policy is formulated in large part on a state-wide basis in California and that the King City district [213 Cal.Rptr. 338] salary level is tied to 11 other districts. It is argued that for these reasons organizing other bargaining units is important to employees in petitioner's unit.
These distinctions may have some validity. However, they do not justify departing from the rulings in Ellis. The employee in disagreement with the goals of the union can not be compelled to lend involuntary support to its growth on the speculative ground that a larger union may be more successful in the Legislature or in negotiating contracts in other districts. The free-rider rationale cannot be used to enslave the dissenting employee to the union currently in power. The Board erred in its ruling on expenses for organizing and recruiting.
(d) Payment to Affiliates
Petitioner notes that although the yearly dues of the local association were only $15, he was charged an agency fee of $150 for school year 1976-1977. He contends that the Board's ruling approving that charge conflicts with Government Code section 3540.1, subdivision (i)(2), which provides that the service fee cannot "exceed the standard initiation fee, periodic dues, and general assessments" of the certified employee organization. He objects to payment of $135 to CTA and NEA, neither of which is the certified employee organization.
The Board found that "[p]ayment to organizations with which the exclusive representative is affiliated ultimately inures to the benefit of the service fee payor in his employment relationship. Such affiliation can augment and enhance staff and legal assistance, training programs, research, communications and a host of activities designed to enhance the exclusive representative's own representational services." To conclude, as petitioner would have us do, that nonmembers cannot be required to pay for such services, would seriously undermine the practice of affiliation. Nothing in the EERA suggests that the Legislature intended such a dramatic effect from Government Code section 3540.1, subdivision (i)(2). The evident purpose of that provision was merely to insure that nonmembers not be charged more than members.
Petitioner proposes an unduly technical reading of section 3540.1, subdivision (i)(2), which makes no allowance for the common practice of affiliation to a state or national union. Such a reading is not required because it will lead to an absurd and unjust result. (See People ex rel. S.F. Bay etc. Com. v. Town of Emeryville (1968) 69 Cal.2d 533, 543-544, 72 Cal.Rptr. 790, 446 P.2d 790.) Where, as here, the union is chosen in its affiliated status to be the exclusive representative of the unit, the limitation of section 3540.1, subdivision (i)(2), must be read to permit assessment of dues and fees to defray all costs properly assessed against nonmembers, regardless of whether the local or the national affiliate provided the benefit and assessed the dues and fees. The Board's ruling on payment to affiliates was correct.
(e) Publications
Petitioner challenges use of his service fees to support publications produced and distributed by the CTA. He contends that he is not required to pay these costs because they were not incurred by the local union and further argues that he should not be assessed costs for publications that do not relate to bargaining with the employer.
Petitioner's first contention fails for the reasons stated in the foregoing discussion of affiliation fees. The mere fact that CTA, not the local union, produces the publication does not exempt petitioner from contributing to its support. Petitioner's second contention raises a problem with the PERB ruling.
PERB concluded that the various publications were oriented around representation of employees and that neither an algebraic approach nor column-inch exactitude was required in apportioning publication costs between articles devoted to political advocacy and articles publicizing matters [213 Cal.Rptr. 339] related to the role of the exclusive representative. Because the predominant character of the publications was representational, PERB found that petitioner could be required to fully support them.
PERB now concedes that Ellis took a different approach. The Ellis court concluded that if the union could not spend dissenters' funds for a particular activity, it could not spend their funds for writing about that activity. The court approved a rebate plan "figured by calculating the number of lines that are devoted to political issues as a proportion of the total number of lines." (Ellis v. Broth. of Ry., Airline and S.S. Clerks, supra, 466 U.S. at pp. ----, ----, 104 S.Ct. at pp. 1883, 1893.) PERB erred in not requiring a similar computation here.
(f) Payroll Deduction of Service Fees
Petitioner contends that absent statutory authority, it was improper for the union and employer to reach an agreement requiring automatic deduction of services fees from nonmember paychecks. Reliance is placed on Education Code section 45060, which permits a school district to deduct union dues only upon request by the employee, and upon Government Code section 3543.1, which gives an employee union the right to have "membership dues" deducted from paychecks. Petitioner argues that service fees are not membership dues and that they may not be deducted without the employee's written consent.
Petitioner has dropped a related argument that under the EERA payment of agency shop fees should have been made a condition of employment. In San Lorenzo Education Assn. v. Wilson, supra, 32 Cal.3d 841, 187 Cal.Rptr. 432, 654 P.2d 202, the California Supreme Court rejected that interpretation of Government Code section 3540.1, subdivision (i)(2).
Petitioner concedes that in 1982 the statutes were amended to authorize automatic deduction of service fees (Ed.Code, § 45061; Stats.1982, ch. 1148, § 2, p. 4127.) He argues that that legislative act reveals that no such deduction was permitted when the challenged action took place. Petitioner seeks a full rebate of the service fees collected.
PERB, finding no statute to prohibit deduction of service fees, sustained the contract provision, making the following observations: "More significantly, membership in an employee organization is entirely voluntary. It is reasonable for the employer to be given evidence of that voluntary enrollment before deductions from payroll are made. Service fees, however, are mandatory if negotiated pursuant to the legislative authority found in EERA section 3546. Prior approval of the payor is not only unnecessary but inconsistent with the involuntary nature of such fees. Withholding approval would enable the nonmember to circumvent the legislative purpose and negotiated agreement. To provide involuntary payors with this option would inevitably lead to unduly burdensome collection problems...."
PERB's interpretation of the governing statutes should be accepted if it is "not an unreasonable or unprincipled construction." (Oakland Unified School Dist. v. Public Employment Relations Bd. (1981) 120 Cal.App.3d 1007, 1012, 175 Cal.Rptr. 105, quoting Ford Motor Co. v. NLRB (1979) 441 U.S. 488, 495, 99 S.Ct. 1842, 1848, 60 L.Ed.2d 420; see also San Lorenzo Education Assn. v. Wilson, supra, 32 Cal.3d 841, 850, 187 Cal.Rptr. 432, 654 P.2d 202.) In the absence of a statute precluding such deductions, PERB's conclusion that an agency shop agreement could provide for automatic deductions was a reasonable construction. The Legislature's action merely confirmed the reasonableness of PERB's interpretation and removed any doubt about future automatic deductions.
We conclude that PERB was correct in permitting automatic deduction of service fees. We note, however, that Ellis made clear that at least for objecting employees the union is obligated to limit the service fee to permissible costs. Ellis specifically disapproved the "rebate" approach given some currency by language in the Street opinion: "[p] By exacting and using full [213 Cal.Rptr. 340] dues, then refunding months later the portion that it was not allowed to exact in the first place, the union effectively charges the employees for activities that are outside the scope of the statutory authorization. The cost to the employee is, of course, much less than if the money was never returned, but this is a difference of degree only. The harm would be reduced were the union to pay interest on the amount refunded, but respondents did not do so. Even then the union obtains an involuntary loan for purposes to which the employee objects. [p] The only justification for this union borrowing would be administrative convenience. But there are readily available alternatives, such as advance reduction of dues and/or interest-bearing escrow accounts, that place only the slightest additional burden, if any, on the union. Given the existence of acceptable alternatives, the union cannot be allowed to commit dissenters' funds to improper uses even temporarily. A rebate scheme reduces but does not eliminate the statutory violation." (Ellis v. Broth. of Ry., Airline and S.S. Clerks, supra, 466 U.S. 435, 104 S.Ct. 1883, 1890, 80 L.Ed.2d 428.)
(g) Attorney's Fees
Petitioner contends that he should have been awarded attorneys fees under a private attorney general theory because his action meets the test of Code of Civil Procedure section 1021.5: "(a) a significant benefit ... has been conferred on the general public or a large class of persons, (b) the necessity and financial burden of private enforcement are such as to make the award appropriate, and (c) such fees should not in the interest of justice be paid out of the recovery...."
PERB has not accepted petitioner's legal theory, but has adopted the standard used by the National Labor Relations Board in unfair labor practice cases: "attorney's fees will not be awarded to a charging party unless there is a showing that the respondent's unlawful conduct has been repetitive and that its defenses are without arguable merit." PERB defends adoption of that test by citation of its powers and duties, bestowed by Government Code section 3541.3, subdivisions (i) and (n).
We need not decide which, if either, statute authorizes an award of attorney's fees to a successful litigant. Petitioner's success before the Board was almost negligible, consisting of a remand for refund on at most three expenditures. Under any theory, the Board did not abuse its discretion in denying attorney's fees.
Because the issue may arise again on remand, we note, without comment that, on its face, the section relied upon by petitioner authorizes a "court" to award attorney's fees. (Code Civ.Proc., § 1021.5.) The parties have not briefed the question of whether that language prevents application of that section to the Board.
The Board's order is set aside and the matter is remanded for a new hearing to be conducted in accordance with the views expressed herein.
At oral argument, petitioner conceded that his argument for prehearing discovery was dependent upon the burden of proof of expenditures resting on him. In light of our ruling concerning burden of proof, prehearing discovery will not be required.
SCOTT and BARRY-DEAL, JJ., concur.